Kim Riley
TRANSPORTATION TODAY
Former Heads of DOT, FAA Support Air Traffic Control Spin-off Plan
August 25, 2017

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The time to transform and reform the nation’s outdated air traffic control (ATC) network cannot be put off any longer, say two Capitol Hill transportation experts who garnered keen insight from their previous top-level positions at the U.S. Department of Transportation (DOT) and the U.S. Federal Aviation Administration (FAA).

But time is running out as Congress faces a looming Sept. 30 deadline and everything that goes along with it.

Nevertheless, further delaying ATC modernization will intensify the stress upon an already overburdened system that the FAA manages each day using World War II-era ground-based radar, paper strips to designate flight traffic and many essential facilities over the age of 50 years.

It’s no wonder, says James H. Burnley IV, a partner in the Washington, D.C., law offices of Venable LLP, which represents American Airlines, among a wide array of transportation clients, that the U.S. air traffic control system is responsible for almost 50 percent of flight delays every year.

And federal rules dictate that the paper flight strips, which Burnley said many countries did away with 20 years ago, are here to stay in the United States until 2028.

Burnley, who served as former President Ronald Reagan’s Secretary of the Department of Transportation (DOT) from 1987 to 1989, and as DOT’s deputy secretary from 1983 to 1987 and general counsel in 1983, has the pulse on what’s happening with transportation in America.

Currently, Burnley also is a board member of the D.C.-based think tank Eno Center for Transportation and is a co-chairman of the Eno Foundation NextGen Working Group, which is focused on restructuring ATC via major reform.

Earlier this week, Burnley said he supports adoption of the 21st Century AIRR (Aviation Innovation, Reform, and Reauthorization) Act, H.R. 2997, which would transfer operations of ATC services currently provided by the FAA to a separate, not-for-profit corporation and would reauthorize FAA funding and other programs.

Burnley thinks that one of the most fundamental changes needed to improve the nation’s ATC system is to separate it from the FAA—take the safety regulator from the service provider—and end what he calls an inherent conflict of interest. Because what’s happening is that the FAA is both operating and regulating the safety of a transportation service via ATC.

“When I was secretary for the DOT in the late 80s, I thought then as I do now that we can’t get the outcomes we all want by having this unacceptable conflict of interest; we don’t do that in any other areas of the federal government,” Burnley said.

As proposed in H.R. 2997, safety would become the FAA’s primary function and by spinning off ATC, then the FAA could regulate the new entity more objectively and more along the lines of how it handles regulating other areas of the aviation industry, such as the airlines and manufacturers.

“So that’s why I’ve been involved in supporting the House AIRR Act. Fundamentally, it’s a good bill,” he told Transportation Today.

The bipartisan H.R. 2997 also appeals to David Grizzle, a business executive with vast airline and aerospace industries experience who founded the private consultancy Dazzle Partners LLC and who served as the FAA’s chief operating officer where he oversaw air traffic control during the Obama administration.

“The Act represents an artful compromise among, on one hand, those structural elements that are essential to an entity that could consistently provide a modern air traffic control system with ever expanding benefits of safety, efficiency and access, and, on the other hand governance and financial features necessary to gain stakeholder support among skeptical special interest groups,” Grizzle wrote in an email this week to Transportation Today.

While at the FAA from 2009 to 2013, Grizzle also served as the administration’s chief counsel and acting deputy administrator. Prior to his FAA service, Grizzle had a 22-year career with Continental Airlines and its affiliates, retiring as the senior vice president of customer experience. He’s a graduate of Harvard Law School and an advisor on the board of Dynamic Aviation Group Inc., where his work includes giving the aerospace industry advice on how to form new ventures.

The House bill, he says, “would provide a safer, more modern, less expensive and more agile air traffic control system than we have today, and would enable us to regain our global leadership.”

Consumer, taxpayer benefits

Both Grizzle and Burnley think H.R. 2997’s proposed changes for air traffic control would prove to be beneficial for taxpayers and consumers.

For example, ATC today is funded largely through ticket and fuel taxes, which under the House proposal would be replaced by user fees.

“In all other countries where air traffic control has been separated from the government, costs have declined through efficiencies. We would expect the same benefit to occur in the U.S.,” Grizzle said.

“Travelers are the real beneficiaries of this intended restructure,” he continued. “Through modernization, they will experience fewer and shorter delays, generally shorter flight times and fewer disruptions because old equipment goes out without a backup.”

Over time, H.R. 2997 would be “extremely beneficial” for both taxpayers and consumers because government-run and nonprofit corporations are operated differently, Burnley said.

For instance, taxpayers and consumers would no longer bare the burdens of higher taxes or inflated ticket prices to cover a failed government project or contract that went off the rails, he said, because a nonprofit corporation would be able to make incremental changes to cover any financial losses rather than a massive change all at once.

“I think that gives me cause for optimism for better outcomes that would happen more quickly,” Burnley said.

Rolling down the hill

The little opposition that exists to H.R. 2997 is largely from the National Business Aviation Association (NBAA), which represents private and corporate jet owners.

“It’s the most cynical political activity that I’ve seen,” Burnley said.

“At this point, I can’t explain their opposition,” said Grizzle.

Both Burnley and Grizzle said that the political game has been played fairly by U.S. Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastructure Committee, which has legislative oversight of both the DOT and FAA, and who is the original sponsor of H.R. 2997.

NBAA members now “have more board seats than the airlines, they are exempt from user fees, and they are guaranteed access. Congressman Bill Shuster gave them everything they had asked for and they still are fighting him,” Grizzle said. “I think it’s now become more of a rallying cry to increase membership in their organization.”

Burnley agrees and said “all they’d have to pay is the fuel tax and they still aren’t happy, which isn’t rational.”

Looking ahead, the FAA’s authorization expires Sept. 30, the same day the U.S. government’s funding authority runs out. And the federal government’s fiscal year (FY) ends Sept. 30, giving Congress little time to both come up with a new budget for the next FY and devise a plan to pass legislation that raises the debt ceiling—which if breached could potentially have economic consequences around the globe.

So can an FAA bill happen?

When members of Congress return from August recess, the full House will need to vote on H.R. 2997 and the full Senate needs to vote on its companion bill, sans the rejected ATC-FAA spin-off plan, which is supported by President Donald Trump.

If each house passes their version of the FAA bill, then federal lawmakers still must come together and work out their differences in time to keep the FAA’s authority intact and avoid even a partial shutdown.

Burnley expects it won’t happen by the Sept. 30 deadline.

“It’s probably going to take longer. With appropriations and the debt ceiling on their plate, it will be very difficult to have a substantive and controversial bill like this debated in the Senate,” he said. “There will end up being a short-term extension. I hope there will just be one of them, though.”

Let’s not even talk about the possibility of a government shutdown this fall, although unlike DOT and FAA, air traffic controllers are considered essential workers and would have to report to work.